Daily Archives: July 26, 2018

Investor discussing her investment

Investing in Properties With the Help of FHA Multifamily Financing Services

Investor discussing her investmentInvestors can borrow money for multifamily dwellings with assurance from the Federal Housing Administration (FHA). The various FHA multifamily financing services are multifamily mortgages insured by the FHA with funds issued by a lender. These funds are used to buy properties with more than five units and follow FHA loan limits and qualifications.

Loan Limits, Rates and Down Payment

The FHA Multifamily Acquisition loans have a loan limit of $57,133 per unit for non-elevator buildings and $66,657 for buildings with an elevator. The interest rates vary from 3.2% to 4.9%, with a minimum of 15% of the total price. There should be at least five units with kitchen and baths.

Additionally, there should be no major repairs on the unit and minor repairs must have been completed within a year. The property must have undergone rehab or constructed more than three years prior to applying for an FHA loan. The FHA does not set the loan rate; instead, they insure the loan with approved lenders.

Apartment Buildings

The loan facility is aimed at allowing or expanding on residential buildings for investors. These include high-rise buildings with elevators, as well as detached and non-detached buildings. Predominantly residential buildings with some commercial spaces are also allowed. A collection of single family homes grouped as a multifamily property is allowed as well.

The FHA insures loans for multifamily properties in good condition for investors and borrowers who would manage these properties and keep them in good working conditions. To protect the lender, the FHA also wants to ensure that the investors have good credit standing and can manage multifamily properties.

The FHA doesn’t have any mandate to provide loans. Instead, it acts as a third party for multifamily property loans. The agency insures the loan for a lender. This helps make it easier for the borrower to find a lender. In turn, the lender would be able to release loans faster. The multifamily financing makes it easy for borrowers to invest in residential properties for lease or rent.